Archive for the ‘Chapter 7 Bankruptcy’ Category

In the rare event (in this depressed housing market) that a foreclosure sale yields surplus funds beyond that needed to satisfy the mortgage, the prior homeowner receives those funds; those funds are protected from other creditors and the bankruptcy trustee under Colorado’s Homestead exemption. (more…)

Home Owners Association dues can be a real pain in bankruptcy. Reason being, HOA dues are an ongoing, recurring expense. As such, HOA dues that come due after the homeowner files bankruptcy are still the responsibility of the homeowner. Allow me to explain.

A common scenario: Don Debtor is unable to afford his home and is allowing it to go into foreclosure. But Don also has other debts and is facing lawsuits and potential garnishments. Don got smart fast and did not agonize over the decision to file bankruptcy; he knows bankruptcy will be his ticket to debt freedom and future financial security. The problem: the foreclosure process takes many months; in Colorado, the average foreclosure takes about 9 months to complete (from the month of your first missed payment). Don’s home has a monthly HOA payment of $200 per month and he stopped paying the HOA along with his mortgage; he simply cannot afford to pay since he lost his job and is receiving only unemployment, plus he has no intention to keep the house anyway. (more…)

How do I determine if rental property qualifies as non-consumer debt? We have read that it is the “intent” of the mortgage that matters. We rented out our former home, but refinanced before doing so. We had to use our Veterans Administration loan privilege to refinance since it was the only way to refinance and then rent out without living in the property for a specified term. We have the rental application signed before the refinance, and then a rental agreement signed 3 days after refinance. Will this fact allow our mortgage to be classified “non-consumer” debt?

I filed for chapter 7 bankruptcy and it was discharged 11/08. I had four mortgages (owned investment property). I surrendered the properties and did not reaffirm the mortgage debt. My problem is the mortgage companies foreclosed on me even though I filed for chapter 7 bankruptcy. Now I not only have bankruptcy listed on my credit, I also have foreclosures listed. Is this standard? I thought they had to cease when the bankruptcy petition was filed. (more…)

For tax year 2010, tax returns are due April 18, 2011, not the normal day of April 15. Why? April 15, 2011 falls on the Washington D.C. holiday of Emancipation Day. Since Emancipation Day falls on April 15 and it is an official District of Columbia holiday, taxpayers have until April 18, 2011 to file their tax return, pay their taxes, or file an extension. (D.C. holidays are given the same credence as Federal holidays). (more…)

I own a vacation property, not a timeshare; if I file chapter 7 bankruptcy, will I be able to keep that vacation property?

Answer:

For such a generally worded question, my answer will be, generally no. There are two issues related to vacation properties and bankruptcy, (1) equity, and (2) expense. As an asset, if the vacation property has equity—meaning the property is worth more than what is owed—and if there is no exemption to protect that equity, the bankruptcy trustee will likely sell the property. Exemptions are laws that allow you to keep certain assets or equity in assets notwithstanding the fact that you are filing bankruptcy. However, if you can exempt the equity, then the trustee cannot sell the property. (more…)

I received a Chapter 7 bankruptcy discharge in March 2009 in which I surrendered my primary residence which had a 1st and 2nd mortgage. I ended up modifying my 1st mortgage through the HAMP program, which I am now more than 90 days current on my payments. The 2nd mortgage holder has sent me a letter asking to sign a Dodd-Frank form so I can be eligible to extinguish the debt, which could have tax consequences. I’m not sure if I should sign and send this form back, which I could pay ordinary income tax on the “forgiven” debt, or not send it back since the debt is discharged. This is so confusing! (more…)

My CPA wants $15,000 in advance to prepare my 2007, 2008 and 2009 tax returns. I had an S Corp for my business and 5 LLC’s for Real Estate investments. All are now closed except 1 LLC. I don’t have the $15K and need to file Chapter 7. Business debt is $596K and personal debt is 94K. I have read in books and on web sites that tax returns need to be completed, however Rule 4002(b)(3) states “Provide most recent year return or a written statement that the documentation does not exist”. My question is do tax returns need to be prepared in order to file Chapter 7 and also do the taxes due if any need to be paid prior to filing? (more…)